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03.04.121:01 PM ET

Vladimir Putin Wins Russia Election, but It’s a Fragile Victory

Despite a landslide win in elections, Russia’s new (and former) president has been weakened by growing protests and emptying coffers at the Kremlin. Owen Matthews and Anna Nemtsova on the trouble ahead.

To no one’s surprise, Russian State TV has called the election for Vladimir Putin. But as Russia prepares for a third Putin presidency, it is anything but business as usual in Russia’s corridors of power. For all Putin’s frequently repeated insistence that he represents stability, “there is a sense that all this is not going to last long,” says Gleb Pavlovsky, until last September a top Kremlin spinmeister and now an adviser to billionaire and liberal presidential candidate Mikhail Prokhorov. “Nobody, including Putin, has any idea what will happen to Russian political system after the election.”

The last two months have profoundly changed Russia’s political landscape and precipitated a profound crisis in legitimacy in the Putin regime. Ever since Putin’s announcement in September that he was planning to push his liberal but weak protégé Dmitry Medvedev aside and return to the presidency after a four-year break, resistance to his rule has snowballed. Within days of a blatantly rigged parliamentary election in November, the previously unthinkable suddenly became real. More than 100,000 people demonstrated against Putin on the streets of Moscow—three times—and went unmolested by police. Top Putin loyalists like former finance minister Alexei Kudrin and billionaire Prokhorov began openly calling for fresh, honest elections. And, in an impressive indicator of just how much civil society has been galvanized by the winter of discontent, some 370,000 Russians volunteered as monitors around the country to oversee election proceedings.

Putin won these elections, but he is now sailing in uncharted political waters. In truth he’s been in this choppy region ever since the watershed moment in November when he was publicly booed by a stadium full of boxing fans, the first time in his political life Putin had ever had to face a hostile crowd. Kremlin advisers have ensured that he has never had to face public opposition again—for instance, Putin has not participated in televised debates against opponents, gone out to meet “real” voters, or addressed any audiences other than handpicked supporters bussed in for the occasion. But the stormy campaign season has shown that Putin’s old tricks for controlling Russia’s population are suddenly not working anymore. Most crucially, ever since that boxing-match booing, criticism of the great leader has ceased to be taboo.

Even the architects of Putin’s “sovereign democracy”—the fake democracy with no real choice—admit that the system they created of tightly controlled TV, pro-Kremlin youth groups, and a Putin personality cult has lost its grip on Russians’ hearts and minds. “Putin cannot rule as a Russian tsar any longer—he is not in the center of total consensus,” says Pavlovsky. “The atmosphere of the nation adoring their monarch has evaporated.” Fatally for Putin, opposition to his rule is strongest among Russia’s brightest and best—the middle-class, urban, Internet-using, overseas-traveling professionals who have, ironically enough, prospered most under his rule. And even Vladislav Surkov, the Kremlin’s chief ideologue from 2003 until his sacking in the wake of mass demonstrations last month, admitted in December that “Russia’s smartest people are demanding self-respect.”

Putin’s team has ridiculed Moscow’s revolutionaries as being out of touch with the real Russia beyond the capital’s ring road. And indeed, the core of Putin’s support remains working-class, uneducated voters who depend on the state for their livelihoods and respond to Putin’s fiercely nationalistic rhetoric. But the opposition’s basic criticism of Putin and his system—that the Kremlin and its cronies, from ministers on down to traffic cops, are “crooks and thieves,” in the phrase of anti-corruption campaigner Alexei Navalny—resonates among all classes and regions. Fully 97 percent of Russians told a recent survey that they had direct personal experience of official corruption. “More and more Russians say that Putin must have been a middleman” in the Russian elite’s plundering of the country and treasury, says Pavlovsky. “The most emotional discovery that voters have made in last couple of months is that … Putin is to blame for corruption.”

The stormy campaign season has shown that Putin’s old tricks for controlling Russia’s population are suddenly not working anymore.

Sunday’s vote has shown that despite vocal urban opposition, Putin can still pull off an election. But his real power base rests not with the people but with his own cronies—and recent events have shaken the once-solid faith of this tight-knit group of businessmen and bureaucrats in Putin as their protector and guarantor of their fortunes. “The power structure [Putin] has built rests on fear, personal connections, and money,” says journalist Masha Gessen, the author of The Man Without a Face: The Unlikely Rise of Vladimir Putin. “Now the fear has been taken out of equation, and that means the whole thing is going to collapse, and it will happen soon.” Indeed, leading sociologist (and member of Putin’s United Russia Party) Olga Kryshtanovskaya admits that “the elite understands that the love for Putin is growing weak and that it is time to look for new ways of stability.”

The inherent problem of authoritarian systems is that loyalty to the great leader is absolute—until suddenly a new great leader rises, at which point there’s a stampede for the exits. Putin isn’t at that point yet—he has been challenged by society, but not yet by an individual pretender to the throne. But his immediate task is to reassure his supporters that he is still top dog. The problem is how, and with what money. For much of his first two terms in power Putin presided over a massive rise in global commodities prices that flooded Kremlin coffers with a tsunami of free money. But suddenly, just when Putin needs it most, that tide of money is receding. In 2007 Russia’s federal budget balanced with oil prices at $29 a barrel; in 2012 oil needs to stay at $130 to avoid a deficit and fund Putin’s $160 billion in election spending promises.

Optimists like Kryshtanovskaya believe that Putin will change: “Putin is already opening up toward liberalization. That is obvious.” She cites a recent series of articles in which Putin sets out a surprisingly liberal agenda for this third term, from introducing contested gubernatorial elections (albeit under tight restrictions) to large-scale privatization, cuts in the bureaucracy, helping entrepreneurs by cutting red tape, and even reorganizing FSB, Putin’s alma mater, and the spectacularly corrupt Ministry of Justice and court system. Without these reforms, “the whole system could collapse in a year and a half or two years maximum,” says Igor Yurgens of the Moscow-based Institute of Contemporary Development, a think tank favored by Medvedev. “Reforms we wrote for the Kremlin came too late [for Medvedev], but they are on the way” under Putin, he insists. “Putin must continue reforming for his own survival.”

Perhaps Putin will continue where the hapless but well-intentioned Medvedev left off. Or he could follow his KGB instincts and return to repression—though with the protest movement firmly entrenched in the Internet’s 45 million Russian users, dissent is becoming exponentially harder to control. “There is a battle going on inside the Kremlin,” between hardliners and liberals, Prokhorov told the Financial Times last week. Within the halls of power “there are progressive people.” But there are plenty of reactionary people too—among them Putin’s closest allies, all former KGB men who, like Putin, dislike and do not understand the Internet generation. Their instincts tell them that compromise is a sign of weakness, not strength. And in coming months and years, that will put Putin and his cronies on a collision course with the wealthiest and best-educated part of his own nation.